Global View on Scrap: Turkish market rises sharply, Asian markets follow suit

Friday, 01 December 2023 17:29:31 (GMT+3)   |   Istanbul

While Turkey’s import scrap prices are rising, market players are voicing concerns about the sustainability of the current price levels. The performance of Turkey’s finished steel market has not changed much over the past month, though demand in the local long steel market is slowing down since the construction season is now almost over. Support for the rising trend of scrap prices mostly comes from the relatively livelier flat steel market, lower levels of scrap availability and the approaching holiday season.

Turkey is still looking for shipments for the first half of January, and in some rare cases for December shipments. HMS I/II 70:30 scrap collection prices in the EU are at around €315/mt DAP. For bonus grades, buyers are willing to pay a premium of €20/mt as usual. At the end of the week, ex-US scrap prices have surged above the psychological threshold of $400/mt CFR. A source at one Turkish mill stated, “Although we can see there is premium in this price, the deal can have an impact since the price jumped above $400/mt CFR.” A European scrap supplier commented, “The lack of scrap offers took its toll. There are mills seeking scrap faced with silence from the sellers’ side.” 

Under the current conditions, the deep sea benchmark HMS I/II 80:20 scrap prices in CFR terms have moved up by 2.19 percent week on week. The prices are now 9.24 percent higher month on month in the deep sea segment, with prices being in the range of $388-404/mt CFR.  

Market sources throughout the US agreed that settled scrap prices for December are likely to trend up due to several factors, such as seasonal weather factors, including cold weather and snowstorms that are having a negative impact on scrap collection, the year-end holiday season, and still-rising domestic HRC prices - although the big question is “by how much?”. Some market sources believe the prices will move up by $30-40/gt on primes and up $20/gt on cuts and shredded, while some think the rise will be around $10-20/mt in general. 

Activity in Taiwan’s domestic rebar market has lost some pace this week, though southern Taiwanese mills have been able to conclude sales of approximately 5,000-10,000 mt each. Offers for ex-US HMS I/II (80:20) scrap in containers to Taiwan have increased over the past week from $368-377/mt CFR to $375-380/mt CFR. Japanese scrap suppliers are sharing offers for H1/2 (50:50) scrap by bulk to Taiwan at $385-392/mt CFR, from $370-385/mt CFR last week.  

Over the past two weeks, Vietnam’s import scrap market has followed the trend observed in the international scrap market and moved up sharply. This week, ex-US West Coast HMS I/II 80:20 offers for bulk cargoes to Vietnam are at around $410-415/mt CFR. 

SteelOrbis’ reference price for ex-Japan H2 scrap has moved up this week from JPY 49,000-51,500/mt ($328-345/mt) FOB to JPY 51,000-53,000/mt ($344-358/mt) FOB. 

In Bangladesh, import scrap prices have been relatively stable this week, though trade activity has been lacking strength this week amid continued issues with opening letters of credit (LCs). In the containerized segment, offers for ex-UK/EU shredded scrap have remained unchanged at $430-435/mt CFR, while offers for ex-Australia material are still at around $430/mt CFR. Meanwhile, offers for ex-Malaysia HMS I/II 80:20 and PNS scrap have been voiced at $410/mt CFR and $440/mt CFR, respectively, the same as last week, with a few deals reported to have been signed at the above levels. PNS from Hong Kong has been reported at $440-445/mt CFR. In the bulk segment, no fresh deals have been reported so far, while offers for ex-US HMS I/II 80:20 scrap have remained at $420/mt CFR. Offers for ex-US shredded and bonus scrap have been estimated at $425/mt CFR and $430/mt CFR, respectively, the same as last week.

In Pakistan, import scrap prices have remained largely unchanged over the past week, while deals remain occasional amid letter of credit issues coupled with low construction activities, weak rebar sales, and uncertainty over the national currency. Most offers for ex-EU/UK shredded scrap in containers have been voiced at $415/mt CFR, the same as last week, though several suppliers have been offering at $418-420/mt CFR. At the same time, according to sources, a deal for around 1,000 mt of ex-EU shredded scrap has been signed at $413/mt CFR, while another batch of ex-UK materials has changed hands at $415/mt CFR. At the same time, this week leading rebar producers have increased their offers for 10-12 mm rebar of grade 60 to PKR 269,000-270,500/mt ($943-948/mt) ex-works, up by around PKR 2,000-5,000/mt ($7-18/mt) week on week.

The bullish trend in the local Italian scrap market has gained further momentum this week even though there has been no real support from finished steel demand. On average, scrap prices have risen by €10-20/mt and "continue to rise in each new contract" due to the scarcity of available scrap while mills need to replenish their yards.

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